« Blair's Legacy | Main | Handbags - Call that a fight? »

iJob - A site to learn from

www.ijob.org.uk :: I,Job :: Home

Why are European and British companies not enjoying the dynamic growth and success of Indian and Chinese businesses?

Businesses in countries where government imposes lower taxes and less red tape succeed better. They can create jobs, seek out new business opportunities, and expand more easily.

Behind every job there is an individual, a family, and a community, that rely on its continued existence.

But excessive taxes and regulation threaten the jobs we all rely on.

.....

The following example describes a typical job, with an average-level wage, in a typical (small/ medium-sized) company in the UK....

After all taxes are taken into account, Derek receives less than half of the total value of his package.

The company deducts income tax (£4,214) and employee's National Insurance (£2,229) from Derek's pay (£25,000) before he receives it, leaving £18,557. Then, from his take-home pay, Derek has to pay VAT on nearly all purchases, as well as petrol duty, alcohol and tobacco duties, TV licence and road tax. The Office for National Statistics estimates that these (so-called "indirect") taxes take up about 15% of the average household's gross income: in Derek's case, £3,750. In addition, Derek probably pays some £625 in council tax (average estimated by the Office for National Statistics). These additional taxes reduce his take-home pay to £14,182. Even after this, the costs of some basic items of expenditure are inflated by government policy -- for example, the European Union's Common Agricultural Policy more or less doubles the cost of a weekly food bill.....

The company that created this typical job, employing Derek, has a gross annual income of £21,150,000 (including VAT). The biggest beneficiary of the work the company does is the government -- not the owners of the company, and not the employees. If things go well, the government takes almost 50% of the company's turnover in taxes of various kinds. But if things go badly and the business fails, the government loses nothing, while the investors lose all the money they put into the business.....

Comments

Hard to imagine there's not a huge lot of meddlesome bureaucracy in India and China, but maybe it's a matter of baksheesh and a lower payment/offset that removes such obstacles, relative to the Western penchant for creating bureaucracies and obstacles of such commanding height and bolstered with the weight of Law that they are nearly in-assailable...

Whenever I hire a plumber, carpenter, or painter, they expect to be paid in cash. I definetley went to the wrong school.

Post a comment